Tech Today: Zebra Surges, Okta Rises, Pandora Falls, Roku Plunges

By

Tiernan Ray

Feb. 22, 2018 10:54 a.m. ET

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Here are some things going on today in your world of tech:

Zebra surges

Shares of object tracking technology maker Zebra (ZBRA) — they produce the technology behind a lot of bar codes that are put on inventory, packages, and even hospital patients — are surging after the company this morning reportedQ4 revenue that topped analysts’ expectations, with $1.03 billion versus $980 million expected, and beat by a wide margin with its earnings per share of $2.33, versus $2.12 expected.

The company’s outlook for this quarter looks even strong, over consensus by $50 million at the high end.

The stock is up $15.69, or 13%, at $136.04.

Roku crashes to earth

Shares of Roku (ROKU), the streaming video pioneer that went public in September, continue to plunge following a disappointing Q1 revenue forecast last night. The stock is down $7.36, or 14%, at $43.74, a little bit better than the 22% decline at the worst point last night.

Although Roku's chief financial officer, Steve Louden,said the company feels just fine about the way things are going, clearly others have different feelings.

Mark Mahaney of RBC Capital Markets, reiterating a Sector Perform rating, writes that expectations were simply “mile-high” going into the report.” He notes some metrics didn’t go the way people wanted, with Q4 revenue just squeezing past consensus, and the platform revenue’s growth decelerating."

"Oh, and the stock was up about 100%” since Q3’s report, he notes.

CEO Anthony Wood was on CNBC talking with host David Faber a short while ago. Asked by Faber how he felt, he said, "We had a really fantastic Q4,” adding, "If we were a traditional cable company that would make us the number three distributor behind Comcast (CMCSA) and AT&T (T).” Wood was pressed by Faber as to why the stock is down so sharply.

"Day to day stock trading is based on a lot of factors, but we are in a great position."

Faber asked him about the slowing hours growth, whether, as Morgan Stanley’s Ben Swinburne asked, new users are viewing fewer hours than the traditional Roku user, especially those who come through the "Roku TV Program.” Wood dismissed it, saying that users who come to Roku via a smart TV can be induced to consume more hours over time.

Pandora plops

Another loser from last night is Pandora Media (P), whose stock is now down 43 cents, or almost 9%, at $4.43, reversing an initial 9% gain last night, after the company’s Q4 report topped expectations, but its Q1 outlook, offered on the conference call afterward, fell below.

CEO Roger Lynchtells my colleagueEmily Bary over at Marketwatch that the company’s managing to improve “engagement” among users.

But the Street today is cutting price targets, includingVictor Anthony of Aegis Capital, who cut his own target to $7 from $12, while reiterating a Buy rating.

Anthony concedes he’s seen "better fundamental online ad-driven/sub-based models” at other companies, but "at ~0.7x our 2018 revenue estimate, the valuation is far from demanding,” so he recommends investors think of Pandora as a “call option."

Okta surprises

Shares of identity management technology vendor Okta (OKTA) are up 88 cents, or 2.5%, at $36.21, after the company this morning positively pre-announced its January-ending Q4, projecting revenue in a range of $77 million to $77.5 million, topping consensus for $70.71 million.

The company also said it made a private placement of $300 million worth of convertible notes.

Shebly Seyrafi of FBN Securities, who has an Outperform rating on the shares, and a $40 price target, writes that the beat is consistent with his own research, which had suggested the company is “executing ahead of expectations.” He looks at the $300 million convert and asks, with about $570 million in total gross cash after the offering, this “may be indicative of Okta contemplating making some acquisitions."

Here comes HPQ

Shares of HP Inc. (HPQ) are up 37 cents, or 1.8%, at $21.54, in advance of its earnings report this afternoon of its fiscal Q1 ending in January.

"While it's background noise for investors in the near-term, with the News Feed overhaul and other actions that Facebook has implemented over the past few months, its clear with more 'heat in
the kitchen from the Beltway' that further modest changes to their business model around advertising and news feeds/content could be in store over the next 12 to 18 months," analyst Daniel Ives wrote.

The market for 3-D sensing in smartphones could be worth $10 billion by 2021, opines David Dai of Bernstein, which should be good news for suppliers such as Sony, AAC Technologies, Sunny Optical Technology Group, Largan Precision; Lumentum Holdings, and ams AG. Apple is leading with the iPhone, but there's a whole new wave of technology coming called "time of flight."

Twilio's "Flex" software, and Microsoft's "Teams" program are examples of how enterprise applications are changing to embrace the "wave of change" rippling through corporations, emphasizing collaborations between far-flung teams of people, write analysts at Canaccord Genuity.

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